NEW YORK, Jan. 26, 2004 (PRIMEZONE) -- The law firm of Kirby McInerney & Squire, LLP announced that the Delaware Chancery Court issued an opinion on January 23, 2004, denying a motion to dismiss and ruling that a shareholder derivative suit against certain directors and officers of eBay, Inc. (Nasdaq:EBAY) and Goldman Sachs Group Inc. (NYSE:GS) may proceed. The suit alleges that eBay's investment banker, Goldman Sachs engaged in the practice of "spinning" by allocating shares of Initial Public Offerings of stock to eBay insiders in exchange for continued and future investment banking business from eBay. Plaintiffs allege that corporate insiders usurped millions of dollars worth of such shares, which rightfully belonged to eBay and its shareholders.
The court found that plaintiffs had stated a valid cause of action against the defendant eBay directors for breaching their duty of loyalty to eBay by accepting these shares for themselves and against Goldman for aiding and abetting in the breach. In allowing the lawsuit to proceed, Chancellor William B. Chandler III, of the Delaware Chancery Court, stated that the complaint "indicate(s) that unique, below-market price investment opportunities were offered by Goldman Sachs to the insider defendants as financial inducements to maintain and secure corporate business." The Court recognized that "the defendant directors were ... not free to accept this consideration from a company, Goldman Sachs, that was doing significant business with eBay..."
Kirby McInerney & Squire, LLP is co-lead counsel for the plaintiff shareholders in the lawsuit. Peter S. Linden, one of the lead attorneys for plaintiffs noted that "The decision reaffirms the time-honored principle that persons who run public companies are not to take a corporation's properties for themselves, and persons that help them do so can be culpable, as well."
Plaintiffs are represented by Kirby McInerney & Squire, LLP, which specializes in complex litigation, including securities class actions and is active in corporate governance. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and mulitdistrict litigation. The firm's efforts on behalf of shareholders in securities and shareholder litigation have resulted in recoveries totaling hundreds of millions of dollars, and the firm's achievements and quality of service have been chronicled in numerous published decisions. More information about the firm can be obtained from Kirby McInerney & Squire's website at www.kmslaw.com.